News

ITT2018: MSC Cruises chief warns yields could drop amid mass growth

Cruise line yields could fall in the future due to the volume of new ships entering the market in the next decade, according to the boss of MSC Cruises.

A total of 106 ships are expected to launch between 2017-26, including 12 alone from MSC Cruises. Other mainstream cruise brands such as Royal Caribbean International has six ships on its order books and Norwegian Cruise Line has seven. 48 expedition and luxury ships are also planned.

Asked whether occupancy levels were at risk of falling from so much growth, chief executive Gianni Onorato told delegates at the ITT Conference in Sicily: “No, we are not crazy. But in difficult times it can have an impact on yields more than occupancy. So I think this will be more of an issue than occupancy levels.”

Onorato said the slowdown in cruise bookings last year in the UK was due to a “lack of capacity” in 2017 and said he was very “optimistic” about the British market going forward.

He said the biggest challenge facing cruise lines was future proofing ships which are built to last 20 years.

“Knowing what guests want in 2040 when you’re building them now is very difficult to predict so we need to have a flexible mindset and be able to follow guests’ needs (in terms of technology) but at the same time maintain human contact,” Onorato said.

Share article

View Comments

Jacobs Media is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.